Disparate Impact: Liability Created by Aggregate Decisions

Florida Power Corporation (“FPC”) operated as a publicly-regulated electric utility monopoly until 1992, when Congress opened the industry to competition through the Energy Policy Act of 1992, 106 Stat. 2776 (1992). Florida Progress Corporation is its parent corporation. Wanda Adams and several other plaintiffs were terminated by FPC between 1992 and 1996, during a series of reorganizations the company states were necessary to maintain its competitiveness in the newly deregulated market. Members of the Adams class sued FPC and its parent corporation claiming, inter alia, that FPC discriminated against them because of their age, in violation of the ADEA.

In 1996, the district court conditionally certified a class of former FPC employees claiming age discrimination. In August 1999, the district court decertified the class and ruled as a matter of law that a disparate impact theory of liability is not available to plaintiffs bringing suit under the ADEA. Because there is some conflict among the circuits and we had not yet ruled on the availability of disparate impact claims under the ADEA, the district court certified the question to us pursuant to 28 U.S.C. § 1292(b). The court was careful to note that he made no findings of fact or assessment of whether the Adams class could produce evidence sufficient to state a claim for disparate impact.

The 11th Circuit affirmed the district court, holding that a disparate impact theory created no cause of action under ADEA.

Issue Areas:

Individual Liberty, Limited Government

Case:

Adams v. Florida Power, (Supreme Court) (merits stage)

Question(s) Presented:

Is the disparate impact method of proving employment discrimination available to plaintiffs suing under the Age Discrimination in Employment Act?

Additional Background:

This Court recognized in Watson v. Fort Worth Bank, 487 U.S. 977, 991 (1988) that there is a reasonable concern on the part of employers that
“a plaintiff may establish a prima facie case of disparate impact through the use of bare statistics, and that the defendant can rebut this statistical showing only by justifying the challenged practice in terms of ‘business necessity,’ Griggs v. Duke Power Co., 401 U.S. 424, 431 (1971), or ‘job relatedness, Albemarle Paper Co., 422 U.S., at 426, 95 S.Ct., at 2375. Standardized tests and criteria, like those at issue in our previous disparate impact cases, can often be justified through formal ‘validation studies. . .’”

ALF’s Amicus Brief:

This case provides the Court with an opportunity to limit the spread of the use of quotas and preferential treatment, and we urge that the statutory language of the ADEA and its legislative history warrant such a limitation. The disparate impact theory makes it likely that any employer who had a segment of his work force that was “imbalanced” by race, gender or age could be forced to engage in the expensive and time-consuming task of defending the “business necessity” of the methods used to select the members of its work force. “The only practicable option for many employers would be to adopt. . .quotas, insuring that no portion of their work forces deviated in. . .composition from the other portions thereof. . . .” and would “. . .leave the employer little choice. . .but to engage in a subjective quota system of employment selection.” Albemarle Paper Co. v. Moody, 422 U.S. 405, 449 (1975) (Blackmun, J., concurring in the judgment).

In an amicus brief, ALF argues that the disparate impact theory is not a viable theory of liability under ADEA because the statutory language does not explicitly provide for disparate impact liability and the policies underlying the ADEA, of prohibiting employers from acting upon assumption that productivity and competence decline with old age, are not implicated in disparate impact cases. The subsequent history of the ADEA and of Title VII show that Congress did not intend the ADEA to create a claim for liability based on disparate impact. This Court has never held that discrimination must always be inferred from different impacts on different employees or groups of employees of a firm’s employment policy, and it should not do so absent explicit Congressional intent.

In 1991 Congress amended Title VII to provide explicitly for causes of action based upon disparate impact (effectively denying defendants due process by assigning liability to their aggregated decisions even though none of them individually break any laws), but at the same time did not add such language to the ADEA amendments added that same year. This Court should not allow the judicial system to be used to add meaning to a statute that Congress rejected, as it did in Griggs in allowing a statute outlawing racial discrimination to instead effectively require it against white males via a racial and gender quota systems becoming necessary to avoid lawsuits.

ALF asks this Court to affirm the 8th Circuit’s decision.